The global oil demand may see a dip of up to 70% this decade as emerging markets continue growing their electric fleets, an AFP report said, citing industry analysis. This translates to a collective savings of up to US$250 billion (over RM1 trillion) annually.

A study of EV cost trends by Carbon Tracker, an industry watchdog, showed that the switch to electric vehicles could save China up to US$80 billion (RM327 billion) annually by 2030. Currently, oil imports account for 1.5% of China’s GDP, and 2.6% of India’s GDP. Both countries are already reducing their dependency on imported oil, and are incentivising those who adopt electric vehicles instead.

Granted, the cost to establish an EV-friendly infrastructure may vary greatly (it’s especially astronomical for countries with no renewable source of energy), but the analysis found that the EV revolution can fund itself as component costs fall over time.

This will make EVs more attainable for the masses in the long run, and the increase in production and uptake would significantly reduce the cost of oil import for China and India. With that, governments may reduce investments in fossil fuel infrastructures (such as pipelines and oil refineries) as transportation gets greener.

Carbon Tracker energy strategy and lead report author, Kingsmill Bond said: “This is a simple choice between growing dependency on what has been expensive oil produced by a foreign cartel, or domestic electricity produced by renewable sources whose prices fall over time. Emerging market importers will bring the oil era to an end.”

What’s more, battery costs have already decreased 20% in the past decade, creating “huge new markets” for EV growth. Using industry baseline figures, the analysis showed that the cost of importing oil to run an average car over 15 years is approximately US$10,000 (RM41k), which is 10 times higher than the cost of the solar equipment needed to power an equivalent electric car.

China is now the leader in electric vehicles. Just last year, a whopping 61% of two-wheeled vehicles sold in the country were fully electric, while 59% of bus sales are electric.

“Factor in the war on plastics hitting petrochemical demand and rising EV penetration in developed markets, it becomes ever more likely that we have seen peak oil demand in 2019,” said Bond.